Menendez: Embezzler later bought Menendez&#39;s building

Embezzler later bought Menendez's building Thursday, October 5, 2006 The Record

In 1993, a federal judge sentenced Lourdes Lopez to prison for helping Union City's treasurer steal hundreds of thousands of dollars in public money.

Ten years later, Lopez came up with nearly half a million dollars to buy a Union City building from an unlikely seller: Bob Menendez, the man who was in the mayor's office while the city funds were embezzled.

The same property has already troubled Menendez's campaign for the U.S. Senate. The North Hudson Community Action Corp., a federally funded non-profit that got some of its grants with Menendez's assistance when he was a congressman, rented the building for nine years. The arrangement has prompted a federal investigation.

Menendez spokesman Matt Miller said the senator was only vaguely familiar with Lopez and unaware of her involvement in the embezzlement case when she bought the building from him.

"He listed the property publicly and sold it as people across the state do every day," Miller said.

Adolfo Lopez, the attorney who handled the purchase for Lourdes Lopez, said the purchase was an "arm's-length real estate transaction" with the congressman, whom his client had met only a few times. His client's connection with the theft from Menendez's former administration is coincidental, he said.

"I'm sure Lourdes knew who Bob Menendez was, but I don't think it made any real difference," said the attorney, who answered questions on Lopez's behalf after several attempts to contact her by The Record were unsuccessful. "We had zero interaction with Mr. Menendez."

Adolfo Lopez and Lourdes Lopez are not related.

Menendez, a Democrat, is in the final weeks of a heated campaign against Republican state Sen. Tom Kean Jr., who has aggressively sought to raise ethical questions about Menendez. Menendez was appointed to the Senate seat in January.

Lopez, who leases the former Menendez building to the North Hudson organization, has crossed paths with Menendez on other occasions. She contributed a modest amount to his campaign funds, worked for one of his more avid donors and owned an eatery that catered one of his political events.

But their most remarkable piece of shared history dates to 1989 and 1990, when Lopez was the assistant manager of a West New York bank branch and Menendez was serving his first term as Union City mayor.

During that period, Union City Treasurer Leonard Grazeola illegally deposited $3.8 million in city and state funds in an account at Lopez's branch of National Westminster Bank, finally keeping nearly $300,000 in funds and interest. Lopez had helped Grazeola set up the account and, upon discovering his scheme, helped him cover it up by holding bank statements instead of mailing them to City Hall, according to court records. She also used the account herself to make loans and cover overdrawn checks for acquaintances, records say.

Lopez faced stiff penalties for bank fraud, including a minimum prison sentence of 21 months, a fine of $5,000 to $1 million and full restitution. But her extensive cooperation with federal authorities got her a light sentence: five months in a halfway house, a $5,000 fine and no restitution. Court records say Lopez was not ordered to repay stolen funds because she could not afford it and another defendant might be responsible for reimbursing the city.

That codefendant was Grazeola, who pleaded guilty to the same scheme and was sentenced to six months in prison in 1993. Later, in state Superior Court in Bergen County, Grazeola was sentenced to a year and restitution for embezzling funds from Ridgefield, where he served as the borough's chief financial officer after leaving Union City's employ in 1990. Authorities said at the time that Grazeola also got lenient sentences for cooperating with federal authorities.

The FBI that year had served subpoenas on Union City seeking records related to a wide range of city contracts and major purchases since 1987, the second year of Menendez's mayoralty, according to news reports at the time. There were conflicting accounts as to the target of the investigation.

Lopez's lawyer said she remembers being questioned about the mayor at the time, but that she had dealt only with Grazeola, the only official who dealt with the fraudulent account.

"Grazeola would come to the bank. He was known to be the treasurer," the attorney said. "She was asked at the time if she ever saw Menendez with him [Grazeola], and her answer at the time, as it is today, was no."

Now a restaurateur and real estate developer, Lopez seems to have recovered from her brush with the law in relatively short order.

"She is a businessperson who has otherwise led an exemplary life," said her attorney.

In recent years, Lopez opened her own restaurant in Union City, around the corner from the Menendez building, before selling that and establishing her latest venture, Sangria Tapas Bar and Restaurant, in Edgewater.

Before going out on her own, she managed the restaurant Mi Bandera, which then was owned in part by Abel Hernandez -- a prominent figure in New Jersey's Cuban-American community, a fervent opponent of Fidel Castro's regime and repeat contributor to Menendez's campaigns.

Hernandez knew Lopez from her days at the bank and gave her the restaurant job during the mid-1990s, Lopez's lawyer said. He also lent her money for one of her real estate deals, he said. Hernandez declined to comment for this story.

Lopez has done well buying and selling real estate, her lawyer said. The Union City property, which was once Menendez's home and then his office, was one of more than a dozen deals struck by Lopez and her son, Mario Lopez Jr., in the past decade, records show.

The Menendez property had come to Lopez's attention through her brother, who worked at the real estate agency that listed it, her lawyer said. Although Lopez knew who the owner was, she was most interested in the property because it included vacant land, he added. After the $450,000 purchase, she got city permission to subdivide the property and build another house there, records show.

Menendez and Lopez had met only a few times at political functions at Mi Bandera and elsewhere, her attorney said. The Menendez campaign occasionally patronized Mi Bandera, according to records, buying at least four meals there in 2001 and 2002. In 2004, Menendez's campaign paid Lopez's restaurant, Amistad, for catering services, records show. Lopez gave $1,000 to Menendez's congressional campaign fund in 1998.

Menendez knew Lopez only as a restaurant owner, his spokesman said, and he remembered the embezzlement case as it pertained to the treasurer.

Lopez's lawyer said his client's dealings with Menendez should not be overblown in the context of a campaign.

"It's very unfair, from her perspective, that scurrilous allegations be thrown out there," he said. "I'd hate to see her dragged into something political."